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That sounds like quite a scoop. But in his June 4 Top Story, Woody reported that MS would allow any version of Win7 to be installed (although OEMs would of course be charged more for higher versions).

Our esteemed contributing editor would like to set the blogosphere straight on the matter:

“Recent reports ping-ponging around the Web breathlessly claim that ‘Microsoft confirms no Windows 7 restrictions for netbooks.’ The gist of the claim is that netbook manufacturers will now be allowed to sell their wares with any version of Windows 7 preinstalled. Supposedly, big bad Microsoft has relented and won’t force Windows 7 Starter Edition on the netbook masses.

“Pardon me, but that’s horse pucky. Microsoft has never had any such restriction. This news ain’t news at all.

“As I wrote on June 4, Microsoft did set restrictions on the maximum hardware that Windows 7 Starter Edition can be installed on. The ‘Softies insist that netbook manufacturers can offer Starter Edition only on netbooks that are suitably stunted. The implication is that you’ll have to pay significantly more for Windows 7 if you want to move up to a more-powerful netbook.

“But there’s never been a restriction saying that netbook manufacturers had to sell Starter Edition. Restricting the super-discounted Starter Edition to skimpy hardware is just a Microsoft marketing move. It’s designed to provide a cheap, weak version of Win7 for entry-level netbooks rather than abandoning the low end to penguin-based Linux alternatives.

“There are some implications to the hardware restrictions that are more sinister, as I described in my June 4 story. But Microsoft has never said it would force netbook manufacturers to sell only Starter Edition.

“Starter Edition is a crock, anyway. Any netbook worth its salt works just fine with Win7 Home Premium. All through the beta and release candidate stages, I ran Windows 7 Ultimate on a rather sedate ASUS 1000H netbook with nary a hiccup. It’s penny-wise and pound-foolish for anyone to buy a netbook with Starter Edition preinstalled.

“And for the Chicken Littles on the Web: cut the fearmongering and get the details right, OK?”

You’ll find more on preparing your PC for a Windows 7 upgrade in today’s Top Story by Scott Spanbauer. The Feds go to lengths to protect online access In the Sept. 10 and Sept. 24 Top Stories, WS contributing editor Scott Dunn described ways you can try to outwit keyloggers if you have no choice but to sign in to a Web site from a public PC. If you really need to protect your password, however, take a tip from the U.S. Department of the Treasury, as Jerry Smith describes:

“The U.S. Treasury has a very robust system for maintaining the security of Internet-accessed accounts under its Treasury Direct program. Treasury Direct is used for buying and holding savings bonds and other Treasury investments.

“In the first stage of login, the user enters a 10-digit account number using the computer keyboard. Then a password of at least 8 characters is entered using a virtual keyboard displayed on the login screen. The virtual keyboard has a random arrangement of keys that changes each time you log in.

“Once this step is completed, a new screen is displayed, requiring information from an access card that has been provided to the account holder. The first step on this screen is to select the correct access-card number from a choice of three different numbers that are shown.

“Then, three grid coordinates are provided that correspond to letters or numbers on a 5-by-10 grid on the access card. The corresponding values must be entered using a randomized virtual keyboard also.

“The first time or two that you log in, this process seems a little tedious. However, after a few logins, you become comfortable with it and can log in quickly. I worry about the security of my bank accounts because of the relative ease with which they can be broken into, but I don’t worry at all about my Treasury Direct account.”

The access card provided to users by the Treasury contains numbers that a hacker wouldn’t know how to display on the screen. Several online banking sites use similar techniques, which are known as two-factor authentication. The two factors include something you know (such as your password) and something physical — such as an ID card, token, fingerprint, retinal scan, and so on.

Two-factor authentication isn’t perfect. A sophisticated “man in the middle” attack can exploit a user’s credentials, as reported by Dancho Danchev on his Zero Day blog at PCMag.com.

But a combination of factors is better than a simple password that could easily be copied by a keylogger when you’re using an untrusted PC.

Reader Jerry Smith will receive a gift certificate for a book, CD, or DVD of his choice for sending a tip we printed. Send us your tips via the Windows Secrets contact page.

The Known Issues column brings you readers’ comments on our recent articles. Dennis O’Reilly is technical editor of WindowsSecrets.com.

Trademarks: Microsoft and Windows are registered trademarks of Microsoft Corporation. The Windows Secrets series of books is published by Wiley Publishing Inc. The Windows Secrets Newsletter, WindowsSecrets.com, WinFind, Windows Gizmos, Security Baseline, Patch Watch, Perimeter Scan, Wacky Web Week, the Logo Design (W, S or road, and Star), and the slogan Everything Microsoft Forgot to Mention all are trademarks and service marks of iNET Interactive. All other marks are the trademarks or service marks of their respective owners.